Goldman Sachs ESG Filter Prioritizes Circularity, Favoring Glencore Over Tech Giants

Goldman Sachs has developed an environmental, social, and governance (ESG) filter that prioritizes companies based on their commitment to recycling and waste reduction, a concept known as circularity. This approach has outperformed the broader market, according to Goldman. Interestingly, this filter favors companies like Glencore, a major coal producer, due to its significant recycling efforts, while excluding tech giants like Microsoft and Alphabet. While still a relatively new concept in investing, circularity emphasizes resource conservation and waste reduction as key factors in long-term sustainability and, therefore, investment potential. Financial institutions are increasingly scrutinizing companies` waste management practices, signaling a growing focus on circularity within the investment community.